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Ovintiv (OVV) Q3 Earnings Miss Estimates, Revenues Beat
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Ovintiv Inc. (OVV - Free Report) reported third-quarter 2023 adjusted earnings per share (EPS) of $1.74, which missed the Zacks Consensus Estimate of $1.75. This can be attributed to a year-over-year decline in realized oil prices. However, the bottom line outperformed the year-ago quarter’s level of $1.44.
Total revenues of $2.6 billion decreased 25.7% from the year-ago quarter’s figure of $3.5 billion due to a year-over-year decline in revenues from products and services. The top line, however, beat the Zacks Consensus Estimate by 2.8%. This was due to higher-than-expected production. Total oil production came in at 171,000 barrels of oil equivalent per day (BOE/d), which outpaced the Zacks Consensus Estimate of 166,000 BOE/d.
OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Dec 15, 2023, which will be paid out on Dec 29, 2023. The company returned approximately $127 million to its shareholders through share buybacks.
Total third-quarter production came in at 571,800 BOE/d compared with 516,300 BOE/d in the prior-year period. The figure beat our projection of 556,800 BOE/d. Higher volumes can be attributed to an 8.3% year-over-year increase in natural gas production that amounted to 1,625 million cubic feet per day (MMcf/d). Production of liquids increased to 300,900 BOE/d.
Ovintiv's realized natural gas price was $2.51 per thousand cubic feet compared with the year-ago quarter’s figure of $1.85. The reported figure beat our projection of $2.40.
The realized oil price decreased to $79.52 per barrel from $81.74 in the third quarter of 2022. The figure beat our projection of $78.29.
Costs, Capex & Balance Sheet
Ovintiv reported total expenses of $2.18 billion in the third quarter, up 0.3% from the year-ago quarter’s level due to higher costs associated with depreciation, depletion and amortization.
Cash from operating activities totaled $906 million, down from the year-ago quarter’s figure of $962 billion. Capital investments amounted to $834 million compared with $511 million in the year-ago period.
The company generated a non-GAAP-free cash flow of $1.11 billion in the quarter.
As of Sep 30, 2023, the company had cash and cash equivalents worth $3 million and long-term debt of $6.2 billion. Its debt-to-capitalization ratio was 39.2%.
Guidance
Ovintiv expects capital expenditures in the $660-$700 million range for fourth-quarter 2023 and between $2.75 billion and 2.79 billion for the full year.
The company expects total production volumes to be in the band of 560,000-580,000 barrels per day (bpd) in the fourth quarter and in the range of 550,000-560,000 bpd for the full year.
It anticipates crude oil and condensate volumes to be in the 220,000-227,000 bpd range in the fourth quarter and between 196,000 bpd and 198,000 bpd for 2023.
In the fourth quarter of 2023, natural gas production is estimated to be in the band of 1,550-1,600 MMcf/d and between 1,615 MMcf/d and 1,630 MMcf/d for the entire year.
Liberty Energy is valued at $3.19 billion. LBRT currently pays a dividend of 20 cents per share, or 1.06% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
CVR Energy is valued at $3.04 billion. In the past year, its shares have lost 23.7%.
CVI currently pays a dividend of $2 per share or 6.61% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Delek US Holdings is worth approximately $1.64 billion. DK currently pays a dividend of 96 cents per share, or 3.75% on an annual basis.
The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.
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Ovintiv (OVV) Q3 Earnings Miss Estimates, Revenues Beat
Ovintiv Inc. (OVV - Free Report) reported third-quarter 2023 adjusted earnings per share (EPS) of $1.74, which missed the Zacks Consensus Estimate of $1.75. This can be attributed to a year-over-year decline in realized oil prices. However, the bottom line outperformed the year-ago quarter’s level of $1.44.
Total revenues of $2.6 billion decreased 25.7% from the year-ago quarter’s figure of $3.5 billion due to a year-over-year decline in revenues from products and services. The top line, however, beat the Zacks Consensus Estimate by 2.8%. This was due to higher-than-expected production. Total oil production came in at 171,000 barrels of oil equivalent per day (BOE/d), which outpaced the Zacks Consensus Estimate of 166,000 BOE/d.
OVV’s board of directors declared a quarterly dividend of 30 cents per share for its common shareholders of record as of Dec 15, 2023, which will be paid out on Dec 29, 2023. The company returned approximately $127 million to its shareholders through share buybacks.
Ovintiv Inc. Price, Consensus and EPS Surprise
Ovintiv Inc. price-consensus-eps-surprise-chart | Ovintiv Inc. Quote
Production & Prices
Total third-quarter production came in at 571,800 BOE/d compared with 516,300 BOE/d in the prior-year period. The figure beat our projection of 556,800 BOE/d. Higher volumes can be attributed to an 8.3% year-over-year increase in natural gas production that amounted to 1,625 million cubic feet per day (MMcf/d). Production of liquids increased to 300,900 BOE/d.
Ovintiv's realized natural gas price was $2.51 per thousand cubic feet compared with the year-ago quarter’s figure of $1.85. The reported figure beat our projection of $2.40.
The realized oil price decreased to $79.52 per barrel from $81.74 in the third quarter of 2022. The figure beat our projection of $78.29.
Costs, Capex & Balance Sheet
Ovintiv reported total expenses of $2.18 billion in the third quarter, up 0.3% from the year-ago quarter’s level due to higher costs associated with depreciation, depletion and amortization.
Cash from operating activities totaled $906 million, down from the year-ago quarter’s figure of $962 billion. Capital investments amounted to $834 million compared with $511 million in the year-ago period.
The company generated a non-GAAP-free cash flow of $1.11 billion in the quarter.
As of Sep 30, 2023, the company had cash and cash equivalents worth $3 million and long-term debt of $6.2 billion. Its debt-to-capitalization ratio was 39.2%.
Guidance
Ovintiv expects capital expenditures in the $660-$700 million range for fourth-quarter 2023 and between $2.75 billion and 2.79 billion for the full year.
The company expects total production volumes to be in the band of 560,000-580,000 barrels per day (bpd) in the fourth quarter and in the range of 550,000-560,000 bpd for the full year.
It anticipates crude oil and condensate volumes to be in the 220,000-227,000 bpd range in the fourth quarter and between 196,000 bpd and 198,000 bpd for 2023.
In the fourth quarter of 2023, natural gas production is estimated to be in the band of 1,550-1,600 MMcf/d and between 1,615 MMcf/d and 1,630 MMcf/d for the entire year.
Zacks Rank and Other Key Picks
Currently, OVV carries a Zacks Rank #2 (Buy).
Investors interested in the energy sector might look at some other top-ranked stocks like Liberty Energy Inc. (LBRT - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and CVR Energy, Inc. (CVI - Free Report) and Delek US Holdings, Inc. (DK - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Liberty Energy is valued at $3.19 billion. LBRT currently pays a dividend of 20 cents per share, or 1.06% on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to North American onshore exploration and production companies.
CVR Energy is valued at $3.04 billion. In the past year, its shares have lost 23.7%.
CVI currently pays a dividend of $2 per share or 6.61% on an annual basis. Its payout ratio currently sits at 30% of earnings.
Delek US Holdings is worth approximately $1.64 billion. DK currently pays a dividend of 96 cents per share, or 3.75% on an annual basis.
The company operates in the integrated downstream energy business in the United States. It operates under three segments — refining, logistics and retail.